Trump Force One - Business Deduction

Donald Trump is self-employed.  Which means his lifestyle is largely a business write-off.  For example his plane, Trump Force One is a business write-off.  He just makes sure everything he does with the jet relates to business.  He's a busy man, so that is easy.  He loves his work, and his work is his life, but then that is true of anyone authentically self-employed.


Trump is not breaking any rules, nor is this extravagance some moral lapse.  Keep in mind how many high-salaried people all this extravagance keeps employed. Not just anyone can clean gold plating.  Also, with people from all over the world in his jet, the gold plating is sensible since gold is anti-bacterial (it is why we use it in teeth fillings, and as money.)

First the laws are written for a purpose:  to get people to run their own businesses.  The Hegemon knows new and small business is where the job growth comes from.  And new tax sources, since the Hegemon prefers to allow at least some innovation and competition to expand the base (in an intellectual property regime, innovation and competition is largely constrained, USA only has to be a but freer than the other places).

Of course, once you make money, they want it all, as Reagan quipped:  If it moves tax it, if it keeps moving regulate it, if it stops moving subsidize it.  Republicans do this to business, democrats do this to people.

If I was Trump, assuming he wins the electoral college vote, I sell everything off by the time I was sworn in, and donate the proceeds to charity.  Enter office with nothing.  (Tell the kids to go find work, but don't embarrass me). Serve the 4-8 years as President, and then come out and start over.  Of course he'd be a billonaire again in a month, but so what, it would not matter.  He'd pull down a million a week in speaker fees.    His lifestyle would still be fabulous and a write-off.

I expect Trump's retirement plan is the same as mine: grab my chest and drop dead mid-sentence at a trade show (in Hong Kong.)  Tag 'im and drag 'im.

But my lifestyle is not so fabulous (fabulous enough for me, sed de gustibus non disputandem est.)  No private planes for me.  Too much of the Icarus idea, cautionary tales of success and extravagance.  That the Dakin family disappeared on a test flight-Christmas vacation is still recalled in the industry.  The lawsuits cite many other crashes.

Trump will change nothing, the ex nihilo credit regime is over.  He'll just preside over the assigning of the costs of the damage done during the boom years.  Hillary would have been obliged to do the same thing.

You can wail and cry about your assets, those tallied in ex nihilo credit, disappearing, or being stolen, or whatever, but they were never there to begin with, nothing from nothing is nothing.  "But I worked for it...!"  You worked for nothing.  Literally.

Or you can be self-employed, and build a business into the vacuum being created by the destruction of the dinosaur ex nihilo credit regime.

There may be no jobs, but there sure is a lot of work to be done, money to be made.

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All Hail China Wheat Dumping to USA!

All USA policies have a winner and a loser, and the USA anti-dumping policies harm working families and smart business people and make rich 1%'rs welfare empresses like Cargill and Archer Daniels Midlands.  Here is example 319,392,085,003,914:

US President Barack Obama said that Washington is filing a complaint against China before the WTO due to China’s government setting prices for wheat, corn and rice well above market levels, which has led to unfair government subsidies in violation of WTO rules.

So the Chinese government sets a higher fake price for these commodities than the US Government does.  Both do it.  Setting higher prices calls forth more of these commodities, which in turn are then dumped at lower prices than what it cost to bring them forth.  You can focus on that if you like, but please do note the explicit fact that ex nihilo credit, that facilitates all this, calls forth goods and services that no free market would call forth.  Again and again we see how this happens, but at no point does anyone (except me apparently) question the ex nihilo credit regime that facilitates this malinvestment and misallocation.  Everyone loves a system that might work for them. No matter how much it harms them.

What the Chinese are doing is taking precisely the same steps USA took to become the Hegemon.  USA as a Hegemon is failing for it has run some course which is ending.  It shows up in our military failures worldwide, our odious leaders, and the biggest beneficiaries of the ex nihilo credit regime, the dinosaur corporations.  But that does not stop the 1%'rs from doubling down:

The US president added that if the United States signed on to the Trans-Pacific Partnership (TPP) free trade agreement, it would expand export opportunity for farmers and businesses and set rules for holding our trading partners accountable.

To hold our trading partners accountable? Before China joined the WTO, it was rules everyone haad to follow except the USA.  Now that China is trading as much as USA, the WTO is useless to USA (so Trump can announce he'll leave it), and USA wants to peel off smaller victims in a new org, the TPP.  it ain't selling.

This is all great news, for once the ex nihilo credit regime dies, or implodes, we can get back to real business, true economy stuff.    And non-issues like "dumping?"  Well, anyone with a wheat market in USA can simply reduce USA supply and by the subsidized China wheat to sell in USA until China goes broke.  Let our fields lie fallow and rest while China slowly dies (assuming dumping is actually happening.

All this is great news for small business.  That which distresses USA big business is advantageous for small business.  The pendulum is swinging back.

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Hurry Up & Get Biggest!

You can grow your own company and avoid the mess corporate in which corporate America is mired...  their jig is up.

Longer-term, if these new secular trends working against profit margins are to remain in place, earnings growth will be much harder to come by for corporate America than it has been over the past few decades. And there are plenty of signs it is already becoming very difficult for them. Corporate cash flow has essentially been flat for the past five years. At the same time, more and more companies recently have resorted to financial engineering via buybacks, non-GAAP reporting and even outright fraud. My guess is this is all in an attempt to make up for broadly slowing organic profit growth due the these secular tailwinds shifting to headwinds.

Alaska Air is buying Virgin, Branson is smart enough to cash out.  This is a nice analysis.

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WalMart: It's Over

WalMart has begun its return to Bentonville, Arkansas, an odyssey begun in 1962. The neat idea of price cutting, "stack 'em high and watch 'em fly" was one of those unforeseen right time right place things when ten years later Nixon took the world off the gold standard (lite).  It was perfectly positioned to borrow asset-less credit and use it to call forth misallocation by aggregating more production to itself.

Wolf Richter dissects Walmart's big stock price drop.  Wolf notes financial engineering.  Read the comments too, he has smart readers. 

As banks lent asset-less credit (malcredit) there was no rational limit on how much Walmart could buy at ever-lower prices as USA factory owners committed the folly of price cutting (page 221 of my book) as they accepted Walmart orders.  With lower costs on product compliments of the banking fraud explicit in lending malcredit, not money, there was no limit to where a genius cost-cutter like Sam Walton could work:

1. Financial engineering.

2. Product

3. Land

4. Buildings

5. Logistics

6. Employees.

The economic policy of the USA is get big or get out.  By being the biggest and baddest in this regime, Walmart was the winner. The irony is collectivism's biggest beneficiary are right wing ideologues.  Or perhaps the lesson is not lost on right wing ideologues.

The losers were the countless smaller factories in USA that, as mentioned above, cut prices to gain Walmart volume business. Family businesses (as well as family farms.) I watched these companies increase sales and go out of business in the 1970s and 1980s. Greed kills. I was in China watching as Walmart buyers could take the demand data from USA, wherein the USA supplier had been squeezed to death (another story from my book, how Levitz choked Kroehler to death) to China and get the Chinese management and state-enterprise subsidies to ever cut costs (labor rates has never had anything to do with international trade) and inevitably build that country's infrastructure.

Walmart is not the only one, every mass-merchandiser, big box retailer now on top played this same game, Toysrus, Lowes, Office Depot, Safeway, Best Buy, Petco, Barnes and Noble, The Gap, you name the category, the biggy played the game.  And every one is in trouble now, because the malcredit game has reached its limit, something everyone knew would happen, but no one could say when.

When.  Now everyone agrees it is over.

This roll-up process wherein the biggest borrower crushed the smaller retailers decimated the family businesses that were the USA economy.  Those families also hired employees to help out.  To be destroyed by this juggernaut was inevitable if you made the mistake of joining in and participating in the force and fraud of accepting malcredit.  Countless small businesses simply moved up market and thrived, another phenomenon I outline in my book.  But those who tried to play the discount game were wiped out.  Critical to your survival was how you defined wealth:  personal accumulation, or the range of goods and services one could afford with what they earned.  Also, people who saw business as a lifestyle and not a money making opportunity always have the advantage.

And as an aside, never in the history of USA has a single American job been "exported."  What happens is as a factory becomes outdated, the new factory with all the new processes and systems is built overseas, with new labor needs. The USA worker does not know how to do the new job, but his dis-employment is useful for diverting attention by claiming his wages are too high, that foreign workers are paid less, as if wages matter in overall costs. As a part of financial engineering,  overseas activity is necessary to book profits overseas in order to avoid USA taxes.  Our biggest importers/exporters also pay negligible taxes, for the all perfectly legal tax exemption programs. It works to blame it on USA labor for he lack of jobs.  Blame the victim. The argument misses the point: the jobs are gone because our only choice, democrats and republicans agree, get big or get out, USA is a collectivist state. All of capitalism's patterns and practices are ordered to collectivism.  The right and left wing obscure this by calling this fraud "the free market" and such moral crimes as NAFTA and TPP "free trade agreements."

The solution to this is to no longer protect by hegemon force the fraud of lending credit, creating malcredit, which has driven out benecredit.  Now that is not going to happen, indeed, quite the opposite.  McDonalds, Boeing, Microsoft, Walmart, and all the companies whose welfare depends on force and fraud are looking to the super-secret TPP program to save them, just as NAFTA was a boost in protectionism in the 1990s. Democrats and republicans alike overwhelming supported NAFTA, and after the election, will pass TPP, no matter who wins.

I do not recommend criminalizing the fraud, merely delegitimizing it by withdrawing the state violence necessary to maintain it.

Bad money crowds out good, bad credit crowds out good credit.

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A&P Goes All Hostess Twinkie

Even in Seattle as a kid  I shopped at A&P, the first supermarket chain in the USA which began to go downhill in the 1970s.  Now it is going into bankruptcy for the second time, following the steps of hostess twinkie,  including blaming the unions.

A regular reader will know this blog honors labor, as any self-employed free-marketer would do, and in fact I've been a teamster and am a B Longshoreman.  (I also busted a longshore local house, so I am not above a bit of mercenary hire).

Blaming the unions for management failure is typical, and useful in liquidating assets while burning the unions.  To be sure when A&P is liquidated almost none of the workers will find similarly paying jobs. This is deflation now.  That is life, but when Burkle bought A&P, the malcredit he used to acquire also covered any A&P pension obligations to the workers.  So the first question is, what is the size and nature of A&P obligations to the employees and retirees.  It goes away, in a bankruptcy, and the liquidation price can go a lot lower.  See Twinkie.

Now Bravo to Stockman for rejecting the "union problem" as the problem leading to bankruptcy.  he demonstrates how poor management and financial shenanigans have led to yet another pension plan being busted.  But in his piece he mentions legacy "vendor agreements" that could not be changed to save A&P.

I wonder: what products, what vendors, what agreements?  Wild guess: the vendors are the "get big or get out" welfare beneficiaries like General Foods, General Mills, Kraft, etc. The products are the 80% of the revenue, 20% of the profits type velveeta cheese and other frankenfoods that one necessarily must be big in which to trade.  The agreements are fine tuned already, and assume ever-inflation, something not the case any more.

If so, are those vendors allowing a customer to go under so they can better serve the stronger few?  For a time?

This would be a good MBA masters thesis.

As an aside, an advertising campaign failed to bring in teh customers.  I wonder how much of that advertising was done online, and what was learned form that component.   Another thesis.

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Small Business CRM

One of my bugaboos about software is it is so often written to do too much, probably so software sellers can charge too much.  One reason I have been all Apple all the time since 1984 (except for two regrettable instances in which I simply gave the MSos PCs away) is that Apple tends to do relatively little and very well.  I am delighted to pay extra to have my computers do less nonsense, timewasting stuff.

For Customer Relationship Management (CRM), in which we simply have a database of customer information which we can manage and act upon, years ago I settled on my small business bookkeeping/accounting package called MYOB.  The software not only covered all business accounting, inventory control, and with a simple workaround offered royalty and commission reports, but it kept track of customer activity and allowed me to track customer contact by phone and follow-up for marketing purposes.

I had bought and attempted to use GoldMine and another CRM package long ago (I forget its name), and found, yet again, the programs cost too much to do too much.  MYOB at the time was about $99.  It was perfect.

Now I've used the same version of MYOB that I bought in 1992 up until this year. That is how good and robust the program has been.  Problem is the world has changed a bit since then, and there is more that can be done leveraging the internet.  Like marketing through emails, billing electronically, etc.

In order that I might keep my old copy of MYOB, I began looking at some of the "cloud" CRM packages, in particular Salesforce.com and http://capsulecrm.com/  I won't link to salesforce.com, because my advice is to avoid salesforce.com by all means.  They have an awesome client recruitment process, and then you are on your own.  I think what saelsforce.com offers is abysmal.  Microsoft's advertising campaign to sell microsoft's CRM is obviously based on the horror of trying to use salesforce.com.  Salesforce.com claims over 100,000 users.  Well, I paid, but never used it.  And for #1 in the category, 100,000 does not seem like a lot of users.

CapsuleCRM is great, with a freebie account for companies with less than 250 contacts to manage.  That just would not work for me.  Above that the pricing is fair, but more expensive than buying a copy of Accountedge.

So I took another look at MYOB.  MYOB changed its name to Acclivity about a decade ago.  The software is called Accountedge, and has basic, pro and network versions, both PC and Mac.  Still $99, which is about half of what $99 was 20 years ago. So I broke down and bought a new version that figures taxes down to the town level (not an issue for a wholesaler) but has all of the internet connectivity and processing benefits and even better CRM.

The help with what was new with Accountedge from live people was awesome, whereas once I had paid, any help from salesforce.com struck me as insulting.

Acclivity seems to have partnered to some degree with Apple, and Apple is quietly building breadth and depth in retail and other commerce systems.  You can check all that out by nosing around the Acclivity website.

This software has been around longer than Quicken and Money, and its origins is in accounting and CRM, something probably few current employees know, but was a factor in my decision to buy it way back in 1990.

Although you can find a copy in many Apple stores and some Office Depots and such, I'd recommend you just buy it direct from Acclivity and download your version.  Here is a strategy I recommend.

You can download a free 30 day trial.  Do so when you have time to work on it during the free trial.  Write down all of your questions, because if you decide to buy, you get 30 days free customer support.  Burn through any questions during that free time.

And say you use it and like it, they will pay you $100 if you recruit another user to buy it!  (No, I am not a part of that program, this is an uncompensated endorsement).

And, they will give your CPA a free copy, so he can easily do your taxes, etc.

And overseas, Accountedge is still sold as MYOB, for whatever reason.

For $99 pc or mac, this is the way to go.

***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013.  Full info here...***

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Increase Sales, Go Out of Business

Long ago I heard that phrase from an accountant, who noted most businesses increase sales just before they close down.  What with liquidation sales, this makes sense, but he was talking about the people who cut prices or run gimmicks to bring in more customers, not realizing what it does to the profit margin and profitability.

Online retail sales are still only about 6% of all retail activity, but boom-time big businesses, price cutters, are trying to get a jump on each other by opening early and earlier on the day after Thanksgiving, BlacK Friday.  How being open more hours with more overhead to sell products at lower prices helps a business, I do not know.  If I was in charge in these times, I would be closed Sundays, and no doubt have the same amount of sales at 1/7th reduction in cost.  If you have what people want, they will arrange to be there when you are open.

At a Halloween party I listened as two 40+year employees of a major department store chain talk about how the entire loss prevention team was laid off.  They estimated it was about a million a year in savings for the one store they worked in, and guess that any increase in theft was less than that.  Now this may be temporary, as many companies lay off well paid crews and then rehire replacements at minimum wage.  In any event, according to the salesperson, stuff is disappearing fast, and it is provoking since their commissions are based on sales and if the good stuff is gone they cannot do better than minimum wage.  Obviously the thieves have figured it out.  I wonder if the loss prevention crew laid off contacted past arrestees to notify them the store is wide open, with a view if the losses are too dear they will get rehired?  Who knows, but perhaps eBay will have the best selection of new garments this Christmas season.

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Election Results: Another Trillion Dollar Bailout

The Fed is going to buy 600 billion, plus more, probably a trillion, in bonds in a bailout of the banks.  At least last time people complained. A trillion in purchases means a whole lotta Wall Street activity.  I guess it is ok to bail out banks if the Republicans are in charge.

This is a back door bailout, since the banks borrow money for free, and then buy bonds that earn 3%, meaning by the magic of compounded interest, taxpayer losses are gains for the banks.  It's slow-cooking the frog.

Free markets do not need to be bailed out.

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Unemployed Website Designers

An anonymous question is posted:

Could you tell us why you've had problems getting your designs done? Were you working in a different area where the designers would only accept an advance?
Thanks!


It's not a problem in getting my designs done, I am just looking for better than I can do myself, which is what I have been doing since 1992.  There are notable exceptions, where people have helped me out in trade with things simple for them, but escape me, and on rare occasion I actually fork over money.  So what I am interested in today is forking over money, only to find there are no takers.  Or if there are, I cannot find them.

I work google and craigslist for local sources, and even tracked sources in India and Hong Kong.  No luck.  Everybody wants a big job.

Here I think, is the problem:  any heavy duty code writing has been done by the ASPs upon which I rely for the integrity of my websites.  Yahoo and google and others have spent billions writing code, and I'd rather pay the $75 a month for 99% of my code than hire someone to reinvent the wheel.

What website "designers" that can be found offer to do many wonderful things, at what turns out to be about the same price anywhere on earth.  Now the problem is, I do not want 99% of what they offer.  I only want some simple things that just about any website designer can do.  I suspect among people whose businesses are not subsidized in some way, are like me, and do not want all of that.  Govt agencies, NGOs, subsidized businesses, they could care less, and they pay whatever, because who cares, it's not their money.

Every website also promises to be the very best at SEO. Two problems with SEO: the cost of getting a ranking that would make a difference would outweigh any benefit.  Chevrolet can pay to be a top hit on google because every Chevrolet sold is an act of bailout for General Motors (and then Chevrolet goes slow pay on the ad agency!) Next, the promise all web designers make that all websites show up on the first page of google search is prima facie nonsense, too.  That's a pretty crowded first page.

So web designers want me to pay for things that I do not want, and in practice are pointless.  Of course, if you have a well equipped design studio, loaded with expensive software, even if you are working out of your home, you have some serious overhead to cover.  Load on top of that the $80,000 in design school student loans at 5.5%, and we have some serious overhead.  So many designers are overhead driven businesses.  I understand their need to charge what amounts to several hundred dollars an hour.

I would gladly pay $25 an hour for what any high school kid could do.  I have on my desk the card of a recent design school graduate.  I've emailed her a couple of times, since she works for $25 an hour.  I am positive she could handle all of my website needs in less than 8 hours.  She has not replied.  She is too wiped out after working odd hours but full time as a waitress (at about $10 an hour) to pay her loans and rent, that she cannot work on my project.  I suspect that is common.  (Apparently she is so tired she missed a typo on her website.) And I only heard about her from a friend of a friend.  As any website designer knows, the web is no place to promote oneself or one's service.  The web merely lowered the cost and widened access to research, but loaded up researchers with the task of processing massive data.  Google puts the best data forward, but getting up there is cost-prohibitive, unless the world has already decided you are number one.

So given all that, let's go where the designers are: hundreds are going to websites where they will compete to please customers.  How come, with all of the web opportunity to to promote oneself,  a designer will go to a project clearing house like 99designs.com? My guess is any other means failed.

But I would much rather sit with a designer in front of my computer and direct them to achieve my small results, than crowdsource, but it that is all that is available, then crowdsourcing may be the way for me.

If I were a designer facing this challenge, I would start a website design agency called "make-up" or some such.  $25 an hour, 4 hour minimum, you pick from a stable of designers whose websites examples are available online.  I would look at what each person knows how to do, and then say, "yes that is what I am looking for."  These should be Penn and Teller type sites, where the designer shows a function, like those websites that have a person pop up and welcome you... and the designer explains how they do it and how many hours it would take.  Or just how to install a survey form or a stat counter on a site.

I know what website designers will say:

1. Visual design is important and bad design hurts business.  Yes, true, but what makes you think you can deliver superior design?  Raw self-confidence?  Mustn't make that claim unless you can demonstrate who made more money than before, and how much, with your sites, and show the before and after income statements of the successful businesses. Otherwise, don't bother.  Money talks, BS walks.

2. The price "all depends..."  Well, it all depends if you are undisciplined.  Mechanics could claim it all depends, and the poor ones do.  The good ones know what the problem is and what it will cost.  Tell me it all depends, and then I need to move on to someone else.

There is a problem, and a tremendous business opportunity.  Those who were smart enough to stay out of the "art school" trap can work for less and are doing so, at a website wherein someone solved a problem of matching willing sellers with willing buyers, in a way that each agrees to.  But it is still not quite what I want.  I want local help.  There is an opportunity waiting, I think.

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Big Business: How USA Works

I've blogged on this before, but here is a specific instance:  google gets massive tax exemptions through international trade, and then forks over more then $30,000 per employee to spend an hour with Obama.  You try that.

Of course, I believe every company should take every tax exemption it can get, up to and including paying no taxes whatsoever.  The fewer taxes paid, the better it is for the country.  Indeed, we should observe and learn nonpayment of taxes leads to prosperity, and thus write taxes out of any laws.

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Women's Start-up Checklist

I received an email offering a checklist for women starting up a business. Essentially it says get your permits, registrations, etc, first. Of course, I politely disagreed. There is another link to another article by one Carol Roth that does make the point customer first.


But I read a link to another article, in which an expert said "'State taxes paid are a healthy deduction; just don’t allow yourself to be surprised by how high Uncle Sam’s bill may be. “I often advise setting aside 50 percent of net income to cover everything,” Wherley says. “If there is something left over, the refund is that much sweeter.”"

Yikes! To be a deduction, state taxes must be paid. Shouldn't the first question be, why are there state taxes, what do we get for our money? And then, the same question should be asked of the feds. As to taxes, the best advice is comply and complain. We need more on the complaint side.

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Harry Reid Explains How Not To Pay Taxes

Jan Helfeld does yeoman work revealing internal contradictions of his targets, but here he ought to have let Senate Majority Leader Harry Reid explain his point: Reid says taxes are voluntary because there are enough loopholes to legally get out of paying any taxes. Now Reid is thinking of big biz in USA when he makes that statement, but it is true of small business as well. If you look at the income statement of a business, there is the income, which is where your customers have found what you offer is worth more to them than their money. Take out costs of goods sold. Then you have gross profit. Next comes overhead, what you spend in your business. What is left is net profit, before taxes. Instead of focussing on net profit, which is really just what is left over, we ought to focus on the overhead, what you live on, what you spend living your lifestyle.
Being self employed means you can largely avoid taxes, as Harry Reid was trying to explain to his interviewer. Sometimes your target has more interesting things to say than you might think. I can see why the people of Nevada love Harry Reid. Listen carefully as Reid points out how people who are employees are trapped in the sort of lack of freedom taxpayers experience in Europe. This video is fascinating.

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